Royal Dutch Shell, the world's largest oil trader, will exit Iraq’s Majnoon oilfield, relinquishing its 45 per cent stake in “due course”, as it looks to focus on its gas and petrochemicals projects in the country. The move is likely to delay the expansion of the field and slowdown the country's production.
“Following extensive discussions with the Ministry of Oil, the oil minister of Iraq formally endorsed a recent Shell proposal to pursue an amicable and mutually acceptable release of the Shell interest in Majnoon, with the timeline to be agreed in due course,” a Shell spokesman said.
The company said that it remains committed to the country, but will look to increase its position in its joint venture with the Iraqi government, known as the Basrah Gas Company (BGC). The spokesman said: “By leaving Majnoon, Shell will be in a stronger position to focus its efforts on the development and growth of the Basrah Gas Company and the Nebras Petrochemicals Project.”
As a result of Shell's exit, target production capacity of 5.0mn barrels a day (bpd) by the end of 2017 will fall short, according to BMI Research. Current output at the field is 235,000bpd, with a 400,000bpd target by 2020.
Saad Al Haditihi, spokesman for Iraqi Prime Minister Haider al-Abadi declined to comment when reached by The National, saying the issue was not political and concerns the oil ministry. Iraqi Oil Minister Jabar Ali Al-Luaibi and Assem Jihad, the Iraqi Oil Ministry spokesman were not reachable by phone.
Disagreement over the contract terms underpins Shell's decision to leave Iraq, said Edward Bell, a commodities analyst at Emirates NBD.
“I’d imagine any negotiation would have been trying to get more revenue allocated to the government over the company and Shell may have decided it was no longer commercial,” he said.
This creates a tussle between the international oil companies demanding higher remuneration and Baghdad wanting further payment reductions to help offset lower oil prices.
“Shell has also mentioned that Baghdad started to apply a performance penalty to the Majnoon remuneration fees in May, which implies the returns have been cut and that has triggered Shell’s exit,” said Richard Mallinson, geopolitical analyst at UK-based Energy Aspects.
In addition, the oil company is looking to sell its stake in the West Qurna 1 field.
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Read more:
[ It’s a buyer’s market for LNG ]
[ Shell and Inpex race in $180bn Australian LNG project ]
[ Oil producers ponder up to six months of further cuts next year ]
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Shell’s chief executive, Ben van Beurden, has been steering the company’s direction to focus more on gas since taking charge in 2014 coupled with the merger with BG.
Basra Gas Company was started in 2013 to treat natural gas that was previously flared. At the end of 2014, the company was processing 500 million standard cubic feet of gas per day with a liquefied petroleum gas (LPG) production record of 2,650 tonnes per day.
Iraq produces around 1 billion cubic feet of gas per day, but 70 per cent of that was flared due to a lack of infrastructure. Shell said that if it could take that flared gas and convert it into electricity, it would generate about 4.5 gigawatts which could supply power to three million homes. That also translates to US$3.5 billion into Iraq’s economy annually.
“Divesting the stakes in Iraqi oil fields would fit with these plans, although the fruitless negotiations with Baghdad were no doubt a factor in why Shell is looking to unload these particular assets,” said Mr Mallinson.
It remains unclear how Baghdad will address the exit of Shell. Russian and Asian national oil companies could step in and replace Shell. Finding foreign investors willing to invest in expanding output from southern fields according to the Iraqi government's commercial terms in the current low oil price environment will remain challenging.
“China’s CNPC is moving ahead with the Halfaya Phase 3 expansion, which is due online next year, after securing some concessions about repayment of expenditure, but that is the only major upstream project that appears to be moving ahead in the federally controlled parts of Iraq,” Mr Mallinson pointed out.
Contracts in the Kurdistan Regional Government (KRG) offer companies more attractive terms in addition to the regular payments that have been forthcoming.
“On paper the terms of these contracts are much more attractive than the model used in the south. But investors remain concerned about the financial stability of the KRG given the low oil price, particularly as the referendum could trigger renewed political tensions with Baghdad and thereby destabilise the fragile situation that current prevails,” Mr Mallinson said.
MATCH INFO
What: 2006 World Cup quarter-final
When: July 1
Where: Gelsenkirchen Stadium, Gelsenkirchen, Germany
Result:
England 0 Portugal 0
(Portugal win 3-1 on penalties)
The specs
Engine: 3.6-litre, V6
Transmission: eight-speed auto
Power: 285hp
Torque: 353Nm
Price: Dh159,900
On sale: now
Nepotism is the name of the game
Salman Khan’s father, Salim Khan, is one of Bollywood’s most legendary screenwriters. Through his partnership with co-writer Javed Akhtar, Salim is credited with having paved the path for the Indian film industry’s blockbuster format in the 1970s. Something his son now rules the roost of. More importantly, the Salim-Javed duo also created the persona of the “angry young man” for Bollywood megastar Amitabh Bachchan in the 1970s, reflecting the angst of the average Indian. In choosing to be the ordinary man’s “hero” as opposed to a thespian in new Bollywood, Salman Khan remains tightly linked to his father’s oeuvre. Thanks dad.
Company Profile
Name: Direct Debit System
Started: Sept 2017
Based: UAE with a subsidiary in the UK
Industry: FinTech
Funding: Undisclosed
Investors: Elaine Jones
Number of employees: 8
Getting there and where to stay
Etihad Airways operates seasonal flights from Abu Dhabi to Nice Côte d'Azur Airport. Services depart the UAE on Wednesdays and Sundays with outbound flights stopping briefly in Rome, return flights are non-stop. Fares start from Dh3,315, flights operate until September 18, 2022.
The Radisson Blu Hotel Nice offers a western location right on Promenade des Anglais with rooms overlooking the Bay of Angels. Stays are priced from €101 ($114), including taxes.
Another way to earn air miles
In addition to the Emirates and Etihad programmes, there is the Air Miles Middle East card, which offers members the ability to choose any airline, has no black-out dates and no restrictions on seat availability. Air Miles is linked up to HSBC credit cards and can also be earned through retail partners such as Spinneys, Sharaf DG and The Toy Store.
An Emirates Dubai-London round-trip ticket costs 180,000 miles on the Air Miles website. But customers earn these ‘miles’ at a much faster rate than airline miles. Adidas offers two air miles per Dh1 spent. Air Miles has partnerships with websites as well, so booking.com and agoda.com offer three miles per Dh1 spent.
“If you use your HSBC credit card when shopping at our partners, you are able to earn Air Miles twice which will mean you can get that flight reward faster and for less spend,” says Paul Lacey, the managing director for Europe, Middle East and India for Aimia, which owns and operates Air Miles Middle East.
Company Profile
Company name: Namara
Started: June 2022
Founder: Mohammed Alnamara
Based: Dubai
Sector: Microfinance
Current number of staff: 16
Investment stage: Series A
Investors: Family offices
COMPANY PROFILE
Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
Based: Dubai
Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)
RESULT
Al Hilal 4 Persepolis 0
Khribin (31', 54', 89'), Al Shahrani 40'
Red card: Otayf (Al Hilal, 49')
Five expert hiking tips
- Always check the weather forecast before setting off
- Make sure you have plenty of water
- Set off early to avoid sudden weather changes in the afternoon
- Wear appropriate clothing and footwear
- Take your litter home with you
THE SPECS
Battery: 60kW lithium-ion phosphate
Power: Up to 201bhp
0 to 100kph: 7.3 seconds
Range: 418km
Price: From Dh149,900
Available: Now
COMPANY PROFILE
Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
$3.6 million led by Global Ventures
if you go
The flights
Etihad and Emirates fly direct from the UAE to Seoul from Dh3,775 return, including taxes
The package
Ski Safari offers a seven-night ski package to Korea, including five nights at the Dragon Valley Hotel in Yongpyong and two nights at Seoul CenterMark hotel, from £720 (Dh3,488) per person, including transfers, based on two travelling in January
The info
Visit www.gokorea.co.uk
Name: Peter Dicce
Title: Assistant dean of students and director of athletics
Favourite sport: soccer
Favourite team: Bayern Munich
Favourite player: Franz Beckenbauer
Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates
THE SPECS
Engine: Four-cylinder 2.5-litre
Transmission: Seven-speed auto
Power: 165hp
Torque: 241Nm
Price: Dh99,900 to Dh134,000
On sale: now
The Transfiguration
Director: Michael O’Shea
Starring: Eric Ruffin, Chloe Levine
Three stars
MATCH INFO
Who: UAE v USA
What: first T20 international
When: Friday, 2pm
Where: ICC Academy in Dubai
DUBAI BLING: EPISODE 1
Creator: Netflix
Stars: Kris Fade, Ebraheem Al Samadi, Zeina Khoury
Rating: 2/5
TWISTERS
Director:+Lee+Isaac+Chung
Starring:+Glen+Powell,+Daisy+Edgar-Jones,+Anthony+Ramos
Rating:+2.5/5
The specs
Engine: 3.9-litre twin-turbo V8
Power: 620hp from 5,750-7,500rpm
Torque: 760Nm from 3,000-5,750rpm
Transmission: Eight-speed dual-clutch auto
On sale: Now
Price: From Dh1.05 million ($286,000)
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
Company Profile
Company name: Hoopla
Date started: March 2023
Founder: Jacqueline Perrottet
Based: Dubai
Number of staff: 10
Investment stage: Pre-seed
Investment required: $500,000
LA LIGA FIXTURES
Friday (UAE kick-off times)
Levante v Real Mallorca (12am)
Leganes v Barcelona (4pm)
Real Betis v Valencia (7pm)
Granada v Atletico Madrid (9.30pm)
Sunday
Real Madrid v Real Sociedad (12am)
Espanyol v Getafe (3pm)
Osasuna v Athletic Bilbao (5pm)
Eibar v Alaves (7pm)
Villarreal v Celta Vigo (9.30pm)
Monday
Real Valladolid v Sevilla (12am)
The biog
Hobbies: Writing and running
Favourite sport: beach volleyball
Favourite holiday destinations: Turkey and Puerto Rico
UAE SQUAD
Goalkeepers: Ali Khaseif, Fahad Al Dhanhani, Mohammed Al Shamsi, Adel Al Hosani
Defenders: Bandar Al Ahbabi, Shaheen Abdulrahman, Walid Abbas, Mahmoud Khamis, Mohammed Barghash, Khalifa Al Hammadi, Hassan Al Mahrami, Yousef Jaber, Salem Rashid, Mohammed Al Attas, Alhassan Saleh
Midfielders: Ali Salmeen, Abdullah Ramadan, Abdullah Al Naqbi, Majed Hassan, Yahya Nader, Ahmed Barman, Abdullah Hamad, Khalfan Mubarak, Khalil Al Hammadi, Tahnoun Al Zaabi, Harib Abdallah, Mohammed Jumah, Yahya Al Ghassani
Forwards: Fabio De Lima, Caio Canedo, Ali Saleh, Ali Mabkhout, Sebastian Tagliabue, Zayed Al Ameri
MATCH INFO
Qalandars 112-4 (10 ovs)
Banton 53 no
Northern Warriors 46 all out (9 ovs)
Kumara 3-10, Garton 3-10, Jordan 2-2, Prasanna 2-7
Qalandars win by six wickets
KILLING OF QASSEM SULEIMANI
Where can I submit a sample?
Volunteers can now submit DNA samples at a number of centres across Abu Dhabi. The programme is open to all ages.
Collection centres in Abu Dhabi include:
- Abu Dhabi National Exhibition Centre (ADNEC)
- Biogenix Labs in Masdar City
- Al Towayya in Al Ain
- NMC Royal Hospital in Khalifa City
- Bareen International Hospital
- NMC Specialty Hospital, Al Ain
- NMC Royal Medical Centre - Abu Dhabi
- NMC Royal Women’s Hospital.
Confirmed bouts (more to be added)
Cory Sandhagen v Umar Nurmagomedov
Nick Diaz v Vicente Luque
Michael Chiesa v Tony Ferguson
Deiveson Figueiredo v Marlon Vera
Mackenzie Dern v Loopy Godinez
Tickets for the August 3 Fight Night, held in partnership with the Department of Culture and Tourism Abu Dhabi, went on sale earlier this month, through www.etihadarena.ae and www.ticketmaster.ae.